Venezuela has finally released the approved whitepaper for the Petro cryptocurrency initial coin offering which will seek to raise $5 billion from investors.

Petro is Venezuela’s state-owned digital currency that is backed by the country’s oil reserves and natural resources.

While President Nicholas Maduro has given the token his full backing by signing the whitepaper, the country’s parliament has voiced their opposition about the token on the premise that it cannot be backed by the country’s currency.

As to why Venezuela is doing this, the answers are pretty obvious. The collapse of oil prices on the international markets since the tail end of 2016 pushed the country to the edge of total collapse with skyrocketing inflation and food shortages.

Venezuela needs unconventional ways to raise money easier and cheaper in order to release itself from one of its worst economic crises since it was liberated by late President Hugo Chavez.

In his defence of the Petro project, Maduro said:

“Petro is a much more ambitious project than other digital convertible currencies such as the digix (gold-backed) or the tether (backed in dollars), because it opens the opportunity for using other assets to backup the currency. Due to the condition of crypto asset with state sanction (non-control) on its own platform, the instrument has a massive adoption potential, with an approximate of 31 million people in Venezuela alone, that is, ten times the size of the global market for cryptocurrencies”.

At $60 per Petro, a price that is far higher than what most digital currencies started with, there are certain promises Venezuela is making to prospective investors. According to the Whitepaper, Petro will give:

“Investors the opportunity to enter the crypto asset market with an instrument of intrinsic value that is safer, more stable and susceptible to a fundamental analysis because it is linked to a widely known industry, and therefore, suitable to be used in large transactions and even as a store of value.”